Cost-effective incentives for cooperation between participants in the electricity market

Abstract

In the Swedish electricity system there is a great potential for increasing the cost efficiency of electricity use. Today economic incentives, offered for instance by existing electricity tariffs, are too weak to improve the use of the system. On the Swedish electricity market, there are at least three different participants, the power producer, the distributor and the customer. Today these participants act separately owing to low awareness of the costs for electricity over the year and the day. If the participants are aware of the real electricity costs, cost-effective incentives for cooperation will arise. When participants cooperate, the introduction of end-use measures will reduce system costs for those participants that are involved in cooperation. We present a system analysis for cooperation between distributor and customers. We also present results from a project, where behaviours of an existing distributor and existing customers have been analysed. The results show that there exist cost-effective incentives for cooperation when end-use measures are introduced.